Electricity to become greener; oil and gas sector to grow despite discounts

In a recent speech to the Toronto Region Board of Trade, National Energy Board (NEB) chair and CEO Peter Watson released Canada’s Energy Future 2018: Energy Supply and Demand Projections to 2040.

According to Watson, renewable sources of electricity will experience significant growth and continue to play a large role in Canada’s electricity generation mix over the next 20 years. The report also states that despite the high-price discounts for Canadian crude oil, oil and natural gas production will continue to grow from current levels over the projection period.

“The increasing pace of change in energy markets and climate policy development suggest that the need for up-to-date analysis on energy trends is greater than ever,” Watson told those gathered.

The NEB’s flagship energy information publication explores how possible energy futures might unfold for Canadians over the long term. NEB energy analysts use economic and energy models to make projections based on certain sets of assumptions given past and recent trends.

Improvements in energy efficiency will enable Canadians to use less energy, even as the economy grows. Sources to meet Canada’s energy demand will become less carbon intensive in the baseline Reference Case, with more natural gas and less coal and oil products used in the future.

“Canada’s energy future will depend on how the country can remain competitive in a global context,” said Jean-Denis Charlebois, chief economist, NEB. “Technological innovation is key.”

Hydro, renewables and natural gas will lead the growth in total Canadian electricity generation, while coal and nuclear generation will see a decline. Renewable sources will play an important role in Canada’s electricity mix with wind capacity doubling and solar nearly tripling over the projection period.

The NEB’s outlook is that crude oil production will increase by 58 per cent and natural gas production will increase by 23 per cent over the next 20 years in the baseline case. Improved technology to reduce emissions will help oil and gas production remain competitive in this changing environment.

Energy markets, policy and technological trends will continue to have a large impact on Canada’s energy future.

The report’s baseline outlook is the Reference Case, which is based on a current economic outlook, a moderate view of energy prices, and includes climate and energy policies similar to those announced at the time of analysis. The Technology Case explores what Canada’s energy future might look like with greater climate policy ambition, innovation and technology adoption. The report also includes cases with higher and lower commodity prices to examine price uncertainty.

As the only publicly available, long-term energy supply and demand outlook covering all energy commodities and all provinces and territories, the NEB’s Canada’s Energy Future series provides Canadians with a key reference point for discussing the country’s energy future.

Report highlights:

In the Reference Case, Canada’s energy demand growth is slowing while sources to meet these demands are becoming less carbon intensive.

In a scenario with greater adoption of new energy technologies, Canadians use over 15 per cent less total energy and 30 per cent less fossil fuels by 2040.